Public awareness of the gender pay gap is sharper than ever. But while the gulf between male and female wages across the UK has narrowed to 9.1%, momentum is stalling. In many sectors, such as aviation and finance, the disparity is actually widening.

According to the latest statistics, almost four out of five companies and public bodies are still paying men more than women. That includes household names, such as easyJet and Lloyds Bank, which have been criticised for their lacklustre evidence of addressing the imbalance.

Holding the most egregious employers accountable is crucial to ensure that progress does not stop. Using official gender pay statistics, let’s see who’s lagging behind in achieving pay equity this year.

Gender pay gap Hall of Shame: our analysis

Various factors can contribute to the gender pay gap. But there is little defence for the extreme discrepancies observed within the above list, which includes industry leaders and household names.

Paying workers fairly is the bare minimum an employer can do. In a Startups survey, 71% of UK SMEs said they would be able to raise wages in 2024 to meet employee demands and the new minimum wage. If they can do it, why can’t a multi-million pound bank?

Truthfully, most large businesses have the resources to close the gender pay gap. What some lack is the desire to do so. In 2023, according to the CIPD, 17% of eligible companies did not produce a gender pay gap report, despite it being a legal requirement. They have at least made more progress than in addressing the Class Pay Gap, on which just 73 employers currently report.

Meaningful progress requires stronger accountability. The government should implement consequences for companies that shirk their reporting obligations.

On top of this, male-controlled boardrooms must open the door to more female leaders, and bonus equality needs prioritising among executives.

Without these measures, the companies that are combating workplace sexism are outliers. Reaching gender parity will remain a distant prospect, measured in decades, not years.

Related reading:

• What is an LGBTQ+ Pay Gap report?
• Gender pay gap in startups
• Gender funding gap: how much can female founders raise?
  

Payroll administration is the process of paying wages to employees, and ensuring the correct tax and National Insurance (NI) contributions are deducted and paid to HMRC.

The role also involves ensuring all employment laws and payroll administration tasks are followed efficiently and compliantly, and the accounting transactions involved balance.

Below, you will find out what payroll administration is, the tasks involved, who is responsible for operating payroll, and payroll best practice.

What is payroll administration?

At its core, payroll administration involves organising, managing, and processing the tasks involved in paying employees’ wages.

This involves deducting tax and NI contributions for both employers and employees, paying these on time to the tax authorities, integrating payments into the cash flow of the business, and balancing and reconciling the transactions to the business’s accounts.

It also covers responsibilities linked to hiring and managing employees, such as employment benefits, employment laws, and the accurate recording of employee hours, wages and deductions.

A payroll administrator must maintain accurate and up-to-date records for employee salary payments, make correct payroll tax payments, and maintain payroll compliance.

How does payroll administration work?

Payroll administration is the epicentre of a business, and involves using payroll software to compile and record all work undertaken by employees. This manifests itself in a range of outgoings, chiefly the accurate, consistent and timely payment of workers.

Errors can undermine staff morale, cause problems with tax authorities, and hinder accurate accounting and financial reporting.

Employers can decide how frequently to operate payroll. In the 20th century, this was weekly. Nowadays, monthly payroll is more common and less complex because payroll tasks need to be performed less often.

The frequency can depend on the type of business. Hospitality is an industry in which weekly payment is more common, because workers tend to cover various shifts, and most workers are on an hourly rate rather than an annual salary because the work is often seasonal.

What are the main payroll administration tasks?

Trained payroll administrators need to understand tax and employment rules and keep updated to operate payroll effectively and comply with regulations.
The main tasks are:

• Collect employee information – Gather employees’ national insurance numbers, tax codes, and bank details to ensure the right payments are made to employees and HMRC.
• Record employee attendance – Keep records of the contracted and actual hours performed by each employee through manual timesheets or bespoke timekeeping software. Record overtime, holidays, sick days, or other absences and process any differences to contracted hours in line with company policy and wider employment laws.
• Use payroll software – This simplifies and standardises payroll calculations and generates accurate payslips.
• Maintain a consistent payroll schedule – Employees need to know when they will be paid to cover their outgoings. Monthly wages are usually the biggest outgoing for a business so it aids your cashflow management to use a regular date.
• Create and distribute payslips – Generate payslips (often using payroll numbers) that detail earnings and deductions and distribute to employees each pay period.
• Report and pay tax to HMRC – Submit the correct payroll tax reports and forms showing all payroll earnings, deductions, tax payments, student loan repayments, and pension contributions to HMRC by specified deadlines to comply with payroll reporting laws and obligations such as Real Time Information (RTI). You also need to pay the correct tax and National Insurance rate liabilities to HMRC by the deadline.
• Compliance – Payroll administration involves many rules to be followed to comply fully with pay and tax regulations. These include minimum and national living wage rules, child labour laws, age related rates, GDPR, and data protection. A payroll administrator must adhere to them to reduce the legal and financial risk to the company of non-compliance or payroll errors. If the business has employees based overseas, shadow payroll can help ensure compliance with the local regulations.

Who is responsible for payroll administration?

The payroll administrator is responsible, but who this is often depends on the nature and size of a business.

For a startup, it is likely to be the owner. For an SME, it will be the accountant or a member of the finance team, if the business has one. If it does, the team is likely to be small, so the person who takes on payroll administration duties may combine this with an additional role within the team, such as the purchase ledger function of paying suppliers and overheads.

For a larger business with a finance team, there will likely be a dedicated payroll administrator. Very large businesses may have a team dedicated to payroll. This team may work with the business’s HR team to get accurate information on staff absences, promotions, and updated remuneration structures.

In some cases, a member of the HR team may be trained to take on the role, as it relates to employee management as well as accounting.

Alternatively, businesses of any size may decide to outsource the entire payroll operation to an external payroll service provider.

Payroll administration: to outsource or keep in house?

This is an important choice and one that really depends on the circumstances, not necessarily the size, of your business.

Some owners like to keep control of wages, benefits and pension costs, so can be hesitant to outsource. On the other hand, for SMEs and startups, outsourcing is one less business function to worry about, leaving more time to focus on growth-oriented aspects of running a business such as marketing or hiring.

For larger businesses, it may be more cost effective to keep payroll administration in house, using a dedicated payroll team to manage it.

Meanwhile, the disadvantages of outsourcing payroll include:

• Being dependent on one payroll provider, whose service level quality could decline
• A loss of control of a vital business function that has a major impact on cash flow and employee morale
• In some cases, it could be more expensive, if outsourcing the function costs more than keeping it in house

What are the challenges of payroll administration?

A payroll administrator has to manage complex information about pay and tax governed by many tax and employment laws. This can make performing the role correctly challenging.

The right tax code for each employee must be applied. It is easy to make an error in pay or deductions, which can mean the accounts don’t balance, creating extra work to reconcile accounts.

A payroll administrator needs to know and apply minimum wage laws and rates, which are usually updated annually. They must comply with company rules about overtime, and ensure an employee doesn’t work more than the maximum legal amount, which is currently 48 hours averaged over a 17-week period.

Complying with tax laws is vital. These change regularly – the UK is renowned for having the longest list of tax laws globally – often after a Budget. New rules usually apply from the start of a new tax year on 6 April. Aspects that a payroll administrator needs to keep up with include tax rates, allowances, thresholds, and reporting rules. All these can impact payroll calculations, payments, and deductions.

How can payroll software help?

Using payroll software is standard and provides many benefits, particularly accuracy and efficiency. Payroll software automates calculations, payments, and deductions, and ensures transactions are made at the correct time.

There are many options. To find the best HR and payroll software product, conduct research, look at reviews, talk to other payroll administrators, and utilise free trials. We’d recommend starting with our guide to the best HR and payroll software.

The main benefit of using payroll software is that it guarantees accuracy, as long as you input the correct data! It saves time and usually money too. It helps your business be compliant, and often comes with extra functions to aid further reporting and analysis that can be integrated into management accounts and other reports.

Conclusion

The role of a payroll administrator is a pivotal one for businesses of all sizes. Paying employee salaries accurately and on time is very important and complying and paying the correct tax, NI, and other deductions is a key responsibility for all businesses. Getting it wrong risks damaging consequences.

It is imperative that all businesses have a trained payroll administration function, whether in house or from an external payroll service provider.

Find out more about HMRC’s PAYE and payroll rules for employers.

Benjamin Salisbury - business journalist

Benjamin Salisbury is an experienced writer, editor and journalist who has worked for national newspapers, leading consumer websites like This Is Money and MoneySavingExpert.com, business analysts including Environment Analyst, AIM Group and written articles for professional bodies and financial companies. He covers news, personal finance, business, startups and property.

Your business is blooming and you’ve reached a point in your journey where employees are a necessity for your operation. Congratulations! Now it’s time to get your head around what having employees on a payroll means for your HMRC obligations and how to pay employees correctly.

Hiring employees entails a commitment to HMRC that you will provide details of real-time information (RTI). RTI refers to a process implemented and enforced by HMRC that requires employers to submit their pay information in real-time.

This guide will look at everything you need to know about RTI, including what it is, what it involves and how to send your RTI submissions.

What is RTI?

Real-time information – or RTI – requires employers to send information to HMRC every time they pay their employees, rather than waiting until the end of the year. It was first introduced for business owners in April 2013.

There are two types of RTI submissions that you need to make as an employer – a Full Payment Submission and an Employer Payment Summary.

A Full Payment Submission – or FPS – is a monthly report every employer must send to HMRC detailing payments made to employees and any deductions made (visit our guide to calculating payroll if working this out is something you need help with).

If you run a PAYE payroll, the FPS must include every employee on this payroll, including short-term employees and those who earn less than £120 per week. This allows HMRC to keep up to date with your payroll and your employees’ details, and your business’s tax and National Insurance contributions.

UK employers should also use an Employer Payment Summary – or EPS – form to share information about their employees’ income tax, National Insurance contributions, and statutory payments – examples of the latter include maternity pay, paternity pay and shared parental pay.

The form is different from the FPS, which is the report sent to HMRC about payments and deductions made to employees every time they are paid. Instead, an EPS only needs to be submitted in certain scenarios. These are:

• If you pay Apprenticeship Levy
• To reclaim statutory payments, like statutory maternity pay or shared parental pay
• To claim Construction Industry Scheme (CIS) deductions if applicable and employee allowance
• If employees haven’t been paid within the tax month
• If you’re not operating your business for an extended period of time – this is applicable to seasonal businesses, for example – or if you’re no longer an employer
• To ​​indicate you’re making your final submission for the tax year

Read more: National living wage explained

What does RTI include?

Let’s first take a look at Full Payment Submission (FPS). This form must include:

1. Employees’ personal information: The employee’s full name, date of birth, address, gender, National Insurance number, tax code, and payroll ID.
2. Employee pay and deductions: An employee’s salary, taxable pay, National Insurance contributions, student loan repayments, and actual pay after deductions. You must also include information like pay dates, the frequency of pay, and the tax month number.
3. Employer information: Your employer PAYE and Accounts Office references, HMRC office number, and the tax year your report falls under.

An FPS will also need to include information on new employees who have joined the company, details of employees who have left and confirmation of any workplace pensions you have started paying.

For more details, check out our comprehensive guide to FPS.

An Employer Payment Summary (EPS) form, on the other hand, only needs to be submitted in certain scenarios, which we’ve outlined in the section above. It should include information about your employees’ income tax, national insurance contributions, and statutory payments such as maternity pay, paternity pay, and shared parental pay.

Be sure to pay HMRC by the 22nd of the month to avoid penalties. Read more about how to fill out your form with our guide to EPS.

Remember, RTI covers all employees, including casual, seasonal and temporary staff.

When should I submit my RTI?

An FPS must be submitted every time you pay employees. You should submit the FPS on or before the date you pay your employees – if you submit the FPS after the payment date, you may have to pay a late fee.

The penalty differs for each company size:

• 1-9 employees: £100
• 10-49 employees: £200
• 50-249 employees: £300
• Those with more the 250 employees: £400

HMRC will add further penalties if you still fail to file your RTI after three months, too.

A tax month in the UK starts on the 6th of the month and runs to the 5th of the following month. Employers should submit their EPS form by the 19th of the following tax month at the latest.

If you wanted to submit an EPS for August, for example, the window is open from the 20th of August until the 19th of September.

If you submit the form after this date, you wouldn’t be able to claim or reclaim any statutory payments, or be credited for any statutory pay. It also means you have to pay the full amount and PAYE liability owed.

When a late EPS form is submitted, HMRC will credit you in the following tax month instead – but it’s best to try to avoid this situation if possible.

How do I send my RTI?

Your RTI submissions can be sent to HMRC via three different avenues:

1. Via a payroll software: Payroll software that is compatible with HMRC’s RTI system can generate and submit an EPS form electronically. This is generally the most popular method for businesses.
2. Through an agent or payroll company: Employers can outsource support with submitting EPS forms to a qualified payroll service provider, who will complete and send them on your behalf.
3. HMRC’s Basic PAYE Tools (BPT): Small businesses with a maximum of nine employees can use this tool to submit their EPS or FPS forms online.

The best option varies from business to business, so take some time to explore what each avenue entails before investing in a solution.

What is a final RTI submission?

A final RTI submission is sent either at the end of the tax year, or if your company shuts down and therefore closes its PAYE scheme.

Don’t worry, this isn’t an additional task to the above – your final RTI submission of the tax year can be either your FPS or your EPS – the payday at your company will determine which of these submissions will come last.

Regardless of which form it may be, HMRC asks that you make it clear on your final submission that it is the last submission of the tax year.

How can I view my RTI submissions?

If you sent your FPS submission in the same tax month as you paid your employees, you will be able to view the report on your HMRC online account from the 10th of the next tax month. However, this is different if you submitted your FPS late:

• If submitted between the 6th and 11th: your HMRC online account will update by the 14th.
• If submitted between the 12th and 19th: your HMRC online account will update within two days.
• When submitted on or after the 20th and you did not send a FPS the previous tax month: your HMRC online account will update within two days.
• When submitted on or after the 20th and you sent a FPS the previous tax month: your HMRC online account will update by the 10th of the next tax month.

For an EPS, you will see ‘Accepted’ in the status field on your HMRC account along with a time and date for when it was sent and accepted. You will also receive a confirmation email from HMRC – it’s best to make sure you keep this safe.

Sending your EPS means you can confirm how much you’ve claimed and check how much you owe via your HMRC account. Remember, confirm this within two days or by the 14th of the month if you sent your EPS before the 11th – and pay HMRC by the 22nd of the month to avoid penalties and further paperwork.

Final thoughts

HMRC obligations like real-time information can be tricky to get your head around as a new employer, but these processes will soon become second nature after a few months of submissions.

And this responsibility doesn’t have to be on your shoulders – as you grow, you could invest in payroll software that can automate the process, outsource it to a payroll service provider, or hire your own payroll professional who can take care of this for you.

Read more: if you have employees based overseas, visit our guide to shadow payroll, a process that will keep you compliant with local pay and tax regulations.

Kirstie Pickering - business journalist

Kirstie is a freelance journalist writing in the tech, startup and business spaces for publications including Sifted, TNW, UKTN, The Business Magazine and Maddyness UK. She also works closely with agencies such as CEW Communications to develop content for their startup and scaleup clients.

Getting to grips with the different features and processes of the payroll guide is an important step for small business owners.

If you have multiple employees to juggle, payroll administration can get confusing. Assigning payroll numbers to each employee can help to make the process easier.

Payroll numbers are a unique reference number used by UK businesses to keep track of and identify individual employees within their payroll system.

Payroll numbers form a key part of overall payroll management, and in this article we’ll take a look at what they are, why you need them, and how they’re used.

What is a payroll number?

A payroll number is a unique sequence of numbers and letters that an employer can assign to an individual employee in order to identify each employee from a payroll perspective.

Payroll numbers help employers to keep track of payroll and add an added layer of security, ensuring you are paying your employees correctly and keeping their personal information and data safe by removing the need to keep masses of data on multiple databases.

While they aren’t a legal requirement, many companies both big and small choose to use payroll numbers in order to minimise the risk of error during payroll, and to make identifying and paying employees easier.

How are payroll numbers created?

Payroll numbers are either created manually by whoever is in charge of payroll within your company, or generated automatically by your payroll system.

If you have a payroll system that generates payroll numbers for you then you may as well save time and effort and use these numbers, rather than creating your own.

If you decide to generate your payroll numbers yourself for your employees, make sure that you stick to a consistent format for each number.

For example, you may want to distinguish between departments by adding abbreviations to the numbers, such as MAR for employees in your marketing team. Whatever you choose, make sure to stick to the same format for every employee.

Many of the best payroll systems will generate payroll numbers for you in a consistent format, but be sure to check this before you sign up to your chosen provider as it’s not a guaranteed feature.

How to find a payroll number

If you’re looking for a payroll number, either as an employer or as an employee, you can usually find it easily on a payslip.

The number is usually displayed at the top of the payslip alongside the employee name.

If your payroll system provider generates your payroll numbers, you’ll also be able to find them on the platform, usually on individual employees records.

The difference between payroll numbers and PAYE numbers

While a payroll number helps to identify an employee within your payroll system, it’s not the only number they will be assigned as part of the payroll calculation process.

If your business is set up to use PAYE (Pay As You Earn) then each employee will also be given a PAYE number from HMRC.

These numbers are generated and assigned by HMRC and are used for the collection of tax and national insurance contributions.

A PAYE reference number will usually consist of letters and numbers, with 3 digits representing the HMRC office dealing with your company, followed by a unique digit combination.

A PAYE number usually looks something like this: 083/TD12458

Employees are able to use their PAYE number to see how much tax they have paid during their time at the company, whilst employers use PAYE numbers when completing end-of-year PAYE tax returns.

How do payroll numbers protect employee data?

As an employer, no matter how big or small your business is, you have a responsibility to protect your employees’ sensitive data and ensure you are GDPR compliant. Payroll numbers can play a big part in that, helping to keep your employees and their personal information anonymous.

All of an employee’s relevant information can be linked to their payroll number – everything from their name and personal contact details to their salary, working hours, and any company benefits they receive.

Payroll numbers therefore allow you to keep track of all of this information without the need to include excess and confidential information about staff within multiple databases and documents. Payroll numbers allow you to keep everything in one place as well as adding an extra layer of security and confidentiality to employee records.

It also helps to prevent any errors or mix ups too, ensuring employees don’t accidentally receive information or payment that’s meant for someone else.

For example, if you have employees with similar names, like George Smith and Georgia Smith, payroll numbers help to ensure records aren’t mixed up.

Similarly, if an employee changes their name during their employment with you, a payroll number ensures their records remain consistent and accurate.

Changing and re-assigning payroll numbers

While assigning payroll numbers is a relatively simple process that will make your overall payroll systems more efficient, there are important factors to note when it comes to changing and re-assigning payroll numbers.

Re-assigning payroll numbers

If an employee leaves your company and is then later re-hired, you must assign them a new payroll number.

This is because payroll numbers are technically issued for each employment, not each employee. They cannot use the same number they were using during their previous employment with your company.

This is also the case when an employee starts a second job within the same company, for example a promotion or role switch to a new department – they will need a new payroll number for the new job.

Changing payroll numbers

While it’s best to avoid changing your payroll numbers and to choose a system and stick to it, occasionally a situation may arise where you need to change an employee’s payroll number (for example, if you use a code for each department, and the employee has moved departments).

Any payroll number changes should be reported straight away to HMRC, in order to ensure there are no duplicate records and HMRC doesn’t demand payment for both numbers.

The good news is that most payroll providers will let you transfer your existing payroll information over, including payroll numbers, meaning if you want to change providers, you can use your existing payroll numbers and format.

Read more: do you have employees based overseas? If so, don’t miss our guide to using shadow payroll to stay compliant with local tax laws.

Conclusion

While payroll numbers may not be a legal requirement for employees, like paying the national living wage for example, most businesses opt to use them in order to keep track of payroll and employee data.

Payroll numbers will not only make the lives of those responsible for your company’s payroll much easier, but they will also ensure your company is compliant with the strictest GDPR policies by keeping your employee data safe and secure.

Lucy Nixon - content writer

With 10 years experience in the digital marketing industry, Lucy is a content writer specialising in ecommerce, website building and all things small business. Her passion is breaking down tricky topics into digestible and engaging content for readers. She's also committed to uncovering the best platforms, tools, and strategies, researching meticulously to providing hand-on tips and advice.

Submitting a Full Payment Submission (FPS) to HMRC is one of the most important obligations for a PAYE payroll system. This involves telling HMRC about payments made to your employees and what deductions you’ve made to their pay.

This guide will explore everything you need to know about an FPS payroll, including what it is, the information you need to complete it and how this is submitted to HMRC.

You may also want to have a look at our guide on the best free payroll software which will make organising paydays for your employees that little bit easier.

What is an FPS?

A Full Payment Submission – or FPS – is a monthly report every employer must send to HMRC detailing payments made to employees and any deductions made. 

If you run a PAYE payroll, the FPS must include every employee on this payroll, including those who earn less than £120 per week or are short-term employees. This allows HMRC to keep up to date with your payroll and your employees’ details and tax and National Insurance contributions.

What goes on an FPS?

Let’s breakdown exactly when you need to put on your FPS, including details of both the employer and employee information required.

Employee personal information: In your FPS submission, you must note the employees’ full name, date of birth, address, gender, National Insurance number, tax code and payroll ID.

Employee pay and deductions: An FPS must include details of an employee’s salary, taxable pay, National Insurance contributions, student loan repayments, and actual pay after deductions (visit our guide to calculating payroll for more details on this process). You must also include additional information like pay dates, the frequency of pay and the tax month number. 

Employer information: In addition to employee information, you must include details about your own operation in an FPS too. This includes your employer PAYE and Accounts Office references, HMRC office number and the tax year of when you’re making the report. 

An FPS will additionally include information of new employees joining the company, when employees leave and if you start paying someone a workplace pension. 

If applicable to your business, an FPS also needs to include your:

• Employer Contracted Out Number (ECON) 
• Unique Taxpayer Reference (UTR) for Self Assessment if you are a sole trader
• Partnership UTR if you are a partnership
• Corporation Tax reference if you are a limited company.

Other rarer instances that must be included on an FPS submission include an employee becoming a director, reaching state pension age, turning 16 years old, changing gender, going on jury service or going to work abroad.

You can also split your FPS into different batches if it’s easier for you – for instance, one can complete one FPS submission for employees and a separate one for directors.

You can find a full list of every section featured on an FPS form on the HMRC website.

When should I submit an FPS?

An FPS must be submitted every time you pay employees as it is one of your Real-Time Information (RTI) obligations as an employer. 

You should submit the FPS on or before the date you pay your employees – if you submit the FPS after the payment date, you may have to pay a late fee. 

Employers with up to nine employees are charged a monthly penalty of £100, those with 10-49 employees are charged £200, and so on. This penalty also accrues daily interest if it’s not paid on time.

To avoid this, it’s best to submit your FPS a few days early if possible, just in case something crops up that limits your time.

Here are some important dates to remember:

• UK tax months run from the 6th of the month to the 5th of the following month. Remember, you must submit the FPS via your HMRC account on or before your normal pay date. 
• After making your submission, you can log in and see how much you as an employer owe in tax and National Insurance on the 10th of the next month.
• Make a note in your diary to pay this balance before the 22nd of the month via your HMRC online portal. 
• If you prefer, you can pay the balance via post – this should be done by the 19th of the month.

If you need to make an extra payment to your employee, you can send an additional FPS after payday. If you use payroll software and it allows you to do so, the extra FPS needs to be sent before your next regular report.

How do I send an FPS?

It’s important to choose an FPS submission method that works best for your business and also one suited to your operation size. The main three options are:

1. Via a payment software: Payroll software that is compatible with HMRC’s RTI system can generate and submit an FPS form electronically. This is the most common method businesses use to submit their FPS.
2. HMRC’s Basic PAYE Tools (BPT): Small businesses with up to nine employees can use this tool to submit their FPS form online.
3. Through an agent or payroll company: Employers can outsource support for submitting the FPS form to a qualified third party, who will complete and send it on their behalf.

Remember to double-check the information inputted on your FPS submission before sending it to HMRC to avoid making a mistake and having to redo it.

Are there any exceptions on when to submit an FPS?

There are a handful of scenarios where an employer can send an FPS after paying employees. These include when:

• An employee hasn’t provided a P45 form and is either paid less than £123 a week or has worked with you for less than a week. An FPS must be submitted within seven days of the employee being paid.
• Your employees’ payday is on a non-banking day like a weekend or bank holiday. The FPS should be submitted the next banking day.
• You make an ad hoc payment outside of your regular payroll – like when you are told about a new starter or a missed overtime payment after sending the FPS. Here, this can be included in your next regular FPS or an additional FPS.

For more situations where late FPS submission is permitted without penalty, visit the HMRC website.

How can I view my FPS submissions?

If you sent your FPS submission in the same tax month as you paid your employees, you will be able to view the report in your HMRC online account from the 10th of the next tax month.

However, this is different if you submitted your FPS late. If submitted in the tax month after payday, these dates will change to the below.

• If submitted between the 6th and 11th: your HMRC online account will update by the 14th.
• If submitted between the 12th and 19th: your HMRC online account will update within two days.
• When submitted on or after the 20th and you did not send a FPS the previous tax month: your HMRC online account will update within two days.
• When submitted on or after the 20th and you sent a FPS the previous tax month: your HMRC online account will update by the 10th of the next tax month.

Final thoughts

HMRC obligations like FPS can seem like a lot of work – they can be time-intensive and a little tricky. However, as an employer, it is important to wrap your head around payroll processes that will eventually become instinctive over time.

If you have employees based overseas, check out our guide to shadow payroll, which can help you stay compliant with their local tax and pay regulations.

Kirstie Pickering - business journalist

Kirstie is a freelance journalist writing in the tech, startup and business spaces for publications including Sifted, TNW, UKTN, The Business Magazine and Maddyness UK. She also works closely with agencies such as CEW Communications to develop content for their startup and scaleup clients.

If you provide any form of staff benefits in addition to paying your employees then you need to complete a P11D form. A P11D form is used by an employer to report any benefits in kind received by an employee, such as health insurance or a company car.

In this guide we’ll take a look at everything you need to know about P11D forms, how and when you need to complete them and what changes you can expect in the future.

What is a P11D form?

A P11D form is used to report any benefits in kind received by employees in addition to their salary.

Benefits such as private healthcare, a company car or a travel to work allowance should all be reported on a P11D form. All benefits in kind have an associated monetary value and therefore can be taxed.

Just like any other kind of monetary income, these benefits need to be reported to HMRC and this is done by completing a P11D form at the end of the tax year.

Who needs to file a P11D form?

P11D forms are completed by the employer, not the employee. This means if you are freelance or self-employed, you need to complete a P11D form too (if you receive any in kind benefits). 

As an employer, you will need to file an individual P11D form for every employee that has received a benefit in kind.

What is a benefit in kind?

Put simply, a benefit in kind is anything that an employee or director receives from their company that’s in addition to their salary. 

They are the “perks” that are often sold as part of the recruitment process to make the job more attractive alongside aspects such as progression opportunities and offering the national living wage. 

As benefits in kind effectively increase an employee’s salary, there may be National Insurance contributions to be paid on them. These contributions are covered by the employer, not the employee.

P11D form exemptions

Not every business expense or benefit needs to be reported on a P11D form. The exemption system means many of the more “everyday” and standard business expenses don’t need to be included.

Expenses that are exempt from P11D form reporting include:

• Business travel
• Business credit card fees
• Subscriptions and services
• Business entertainment
• “Trivial” expenses up to £50 (unless part of a salary sacrifice scheme)

How to complete a P11D form

The good news is that completing and filing a P11D form is a straightforward process, although bear in mind that the more employees you have, the longer it will take. 

The only way to file a P11D form is online. You can either do this directly via the HMRC online service or by using a payroll or P11D software.

As of 2023, HMRC no longer accepts paper filings for P11D forms.

When do I need to file a P11D form?

The deadline to submit your P11D form is 6 July following the relevant tax year. 

For example, your P11D form covering April 2023 – April 2024 needs to be submitted to HMRC by 6 July 2024.

HMRC does not accept multiple submissions of P11D forms, so you will need to submit all of them in one go.

P11D form penalties

Like with any kind of tax filing, you can expect to receive a penalty if you fail to submit your P11D form, or if you miss the deadline.

If you do miss the 6 July deadline, you’ll usually have a two week period to rectify your mistake and get your form filed before HMRC will penalise you.

Following that two week grace period, your company will incur charges of £100 per month for every 50 employees. So if you have 100 employees, your charges will be £200 per month for every month the P11D form remains unfiled.

You’ll get a reminder to file your P11D form if it’s still unfiled in November, and it’s important to note that you can also face fines if your P11D form contains incorrect information.

The penalties faced for an incorrect P11D form will all depend on whether or not HMRC believes it to be a genuine mistake or a case of you willfully trying to deceive the system.

What is a P11D (b) ?

When it comes to filing your P11D form on the HMRC website, you may notice reference to a P11D (b). 

Currently, you’ll also need to submit a P11D (b) form summarising all of the individual P11D forms you’ve submitted for your employees who have received a taxable benefit and for any Class 1A National Insurance you owe.

Even if you already payroll your benefits, you will still need to submit a P11D (b) form in order to pay any owed Class 1A National Insurance.

Changes to the P11D form

There are some big changes on the horizon for P11D forms. 

As of April 2026, all employers will be required to payroll any benefits, rather than submit a P11D form. 

It’s estimated that this change will reduce the need for almost 4 million P11D forms submitted every year, removing the burden on both HMRC and employers.

So what does this change mean for employers? Firstly, it’s a positive step. The change will mean employers no longer need to spend time reporting simple benefits such as health insurance, instead they will be reported in real time through your payroll system.

With that in mind, it’s a good idea to take steps now to ensure your payroll system has the functionality you need to log and record benefits in the system.

Remember though, these changes don’t come into effect until April 2026 and you will still need to file P11D forms until then.

P11D form top tips

To help keep the process of completing and submitting your P11D form as smooth as possible, take a look at these top tips.

1. Keep track of your employee benefits

One of the most common mistakes employers make when it comes to completing P11D forms is not keeping up to date records. This means they end up scrambling to find all of the relevant information they need when they come to complete the form.

To avoid this, keep a record of every single benefit in kind each employee receives throughout the year. This way, you’ll have detailed and up-to-date records on hand when you come to submit your form.

Most payroll software allows you to also track employee benefits or alternatively you can use a dedicated employee benefit system to set up, manage and track your benefits packages. 

2. Don’t forget company leavers

It’s not just your current employees you need to submit a P11D form for. Any employee who received a benefit in kind from your company during the relevant year needs to be reported, even if they have since left your company for alternative employment.

Forgetting about employees who have left your company could result in a penalty from HMRC if they don’t think you’ve submitted the right amount of P11D forms.

3. Know your annual values

For every benefit in kind that you report on a P11D form, you will need to know how much it cost for the year.

If you provide the benefits to employers directly then this should be pretty simple but if you use a third-party, like a private health insurance provider, be sure to ask them for a full breakdown of premiums per employee for the relevant tax year. 

4. Don’t forget your director’s loan

If you have taken out a director’s loan then providing it’s under £10,000 you aren’t required to pay any interest.

If at any point during the tax year your director’s loan exceeds £10,000 then you will be expected to pay interest to HMRC. 

It’s important to know therefore that any overdrawn amount is seen as a benefit from the company and therefore needs to be recorded on a P11D form. 

Conclusion

P11D forms are an essential bit of admin that employers need to be aware of and submit if any employee receives even just one benefit in kind within a tax year.

Lucy Nixon - content writer

With 10 years experience in the digital marketing industry, Lucy is a content writer specialising in ecommerce, website building and all things small business. Her passion is breaking down tricky topics into digestible and engaging content for readers. She's also committed to uncovering the best platforms, tools, and strategies, researching meticulously to offer tried-and-tested tips and advice.

It is important that every small business owner understands what is expected of them by HMRC – and when you put your first employees on payroll, it is crucial to understand the additional forms that must be submitted and how to pay employees correctly.

One of the essential forms is called an Employer Payment Summary (EPS), which employers must submit to HMRC if they pay employees via a Pay As You Earn (PAYE) payroll system. 

This guide will look at everything you need to know about the EPS process, including what the form is, what employers need to include within it and how to go about submitting it correctly and on time to HMRC. 

What is EPS?

An Employer Payment Summary – or EPS – is an essential form that UK employers must submit to HMRC as part of the Real Time Information (RTI) system. This system is a government programme that strives to improve how employers share PAYE information about their employees with HMRC. 

UK employers can use an EPS to share information about their employees’ income tax, National Insurance contributions and statutory payments – examples of the latter include maternity pay, paternity pay and shared parental pay. 

Employers can also use an EPS form to claim Employment Allowance, which reduces an employers’ National Insurance contributions. EPS is important for employers so they are able to reclaim or refund some liabilities from the HMRC regarding the employee payroll. Employers can also claim allowances and deductions from the HMRC through this.

The form is different from the Full Payment Submission (FPS), which is the report sent to HMRC about payments and deductions made to employees every time they are paid. Instead, an EPS only needs to be submitted in certain scenarios – but it’s important to do so by the monthly deadline when it is applicable.

These instances include:

• If you pay Apprenticeship Levy
• To reclaim statutory payments, like Statutory Maternity Pay or Shared Parental Pay
• To claim Construction Industry Scheme (CIS) deductions if applicable and employee allowance
• If employees haven’t been paid within the tax month
• If you’re not operating your business for an extended period of time – this is applicable to seasonal businesses, for example – or if you’re no longer an employer
• To ​​indicate you’re making your final submission for the tax year

HMRC then uses the information from your EPS to check employers are paying the right sums of tax and other contributions on behalf of their staff.

Read more: How is payroll calculated?

How do I submit an EPS?

There are a few ways you can submit your EPS, and the best method for you is an individual choice for each business. The methods to choose from are:

• Via a payment software: Payroll software that is compatible with HMRC’s RTI system can generate and submit an EPS form electronically. This is generally the most popular method for businesses.
• HMRC’s Basic PAYE Tools (BPT): Small businesses with a maximum of nine employees can use this tool to submit their EPS form online.
• Through an agent or payroll company: Employers can outsource support for submitting the EPS form to a qualified third party, who will complete and send it on your behalf.

Remember, it’s important to double-check all information included on an EPS before sending it over to HMRC.

When should I submit an EPS?

It’s important you complete your EPS submission at the right time. A tax month in the UK starts on the 6th of the month and runs to the 5th of the following month. 

Employers should submit their EPS by the 19th of the following tax month at the latest. If you wanted to submit an EPS for September, for example, the window is open from the 20th of September until the 19th of October. 

If you submit the form after this date, this means you wouldn’t be able to claim or reclaim any statutory payments, or be credited for any statutory pay. It also means you have to pay the full amount and PAYE liability owed. 

But don’t panic – when a late EPS form is submitted, HMRC will credit you in the following tax month instead.

What happens after the EPS is sent to HMRC?

Congratulations, you’ve submitted your EPS form – so, what now? If your EPS has been received by HMRC, you will see ‘Accepted’ in the status field on your account along with a time and date for when it was sent and accepted. You will also receive a confirmation email from HMRC – make sure you keep this safe.

Sending the EPS means you can confirm how much you’ve claimed and check how much you owe via your HMRC account. Be sure to confirm this within two days, or by the 14th of the month if you sent your EPS before the 11th.

And don’t forget – make sure to pay HMRC by the 22nd of the month.

Read more: Got employees based overseas? Shadow payroll helps your business stay compliant locally.

What are the common mistakes made with an EPS?

With most small business owners juggling multiple responsibilities, it can be easy to make a mistake on forms that are asking for complicated information.  Here are a few common errors made when submitting an EPS form to keep in mind when completing yours:

• Incomplete or inaccurate details and data
• Failing to submit an EPS when the form is needed
• Missing the submission deadline for the tax month denoted
• Not keeping an extra copy of the completed EPS form for future reference or auditing.

Final thoughts

While HMRC obligations like EPS forms can feel overwhelming, they become quicker and easier to complete with the right research, practice and support.  We’ve got expert guides on  how to pay your employees and how to find the right payroll provider for your small business.

Kirstie Pickering - business journalist

Kirstie is a freelance journalist writing in the tech, startup and business spaces for publications including Sifted, TNW, UKTN, The Business Magazine and Maddyness UK. She also works closely with agencies such as CEW Communications to develop content for their startup and scaleup clients.